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Individual Development and Empowerment Account (IDEA) Program
Under the IDEA Program, the Bank sets aside a portion of its annual Affordable Housing Program contribution to provide matching grants through Bank members for downpayment and closing cost assistance to eligible homebuyers who have saved under Individual Development Account (IDA) or Family Self-Sufficiency (FSS) programs.
Uses
- Promote homeownership opportunities for very low-, low-, and moderate-income households
- Build and maintain relationships with new customers
- Expand deposits and use of your institution’s financial products
- Help achieve your institution’s community investment goals
Key Advantages
- Provides up to $15,000 for each participating household, matching up to $3 for each $1 saved by the homebuyer(s)
- Application process allocates funds for homeownership based on program eligibility, not on competitive scoring
Key Features and Guidelines
Funds Available
The Bank expects to set aside up to 10% of its annual AHP contribution each year to fund the IDEA Program.
Members may apply for a reservation of IDEA funds for up to $400,000 from January 21, 2008, to February 22, 2008. A member may apply for an additional reservation of IDEA funds for up to $50,000, subject to funds availability, until December 1, 2008, only if the member (1) applied for and received a reservation earlier in the year and (2) has fully disbursed those funds or has specifically reserved those funds for one or more homebuyers. Additional reservations will be awarded on a first-come, first-served basis.
If the Bank receives requests for IDEA funds that exceed the amount set aside for the program for that year, the Bank will allocate available funds to eligible applicants in accordance with the Bank’s AHP Implementation Plan.
Applications
The Bank will accept applications from members from January 21, 2008, to February 22, 2008.
Applications must include:
-
Completed 2008 IDEA Program Application for Funds Reservation
-
2008 IDEA Program Application for Funds Reservation Attachment A (if applicable)
-
Executed Affordable Housing Program Direct Subsidy Agreement—Homeownership Set-Aside Program
Homebuyer Eligibility
To be eligible for IDEA funds, the homebuyer must meet the following eligibility criteria:
-
Homebuyer has enrolled in the IDEA Program.*
-
Homebuyer has participated in an IDA program or successfully completed an FSS program leading to homeownership through a local housing authority.
-
Homebuyer has saved for a minimum of 10 months towards the purchase of a home.
-
Homebuyer has successfully completed a homebuyer counseling program.
-
Homebuyer is a first-time homebuyer, as defined by the member.
-
Homebuyers that enrolled in an IDA or FSS program prior to September 1, 2005, must earn 80% or less of the HUD area median income (AMI) at the time of enrollment in the IDA or FSS program and must open an escrow on a home purchase transaction within five years of the time of the IDA or FSS program enrollment.
-
Homebuyers that enroll in an IDA or FSS program on or after September 1, 2005, must meet income eligibility guidelines as published by the Bank and earn 80% or less of the HUD AMI at the time of enrollment in the Bank’s IDEA Program, and must open escrow on a home purchase transaction within five years of the time of enrollment in the IDEA Program.
* Enrollment in the IDEA Program is not a guarantee to the homebuyer of receipt of funds.
Use of Funds
IDEA funds may only be used toward downpayment or reasonable or customary closing costs in conjunction with the purchase of housing to be used as the primary residence of the homebuyer. IDEA funds may not be used by the member or the homebuyer in conjunction with projects or units receiving other subsidies from the Bank through its competitive AHP or other set-aside programs.
Disbursement of Funds
The Bank will reimburse the member after receipt of the HUD-1 settlement statement showing that the amount of subsidy requested was passed on to the homebuyer and used for eligible purposes. If the settlement statement or other closing documents show cash to the homebuyer in an amount greater than $250, then the AHP set-aside subsidy that the Bank will reimburse to the member for the homebuyer will be reduced unless the member and the homebuyer provide sufficient documentation showing that the cash back was used for downpayment or reasonable and customary closing costs or to pay down the mortgage principal or as a credit toward the household's monthly payment on the mortgage loan.
In addition, the member must submit certain certifications and sufficient documentation prior to the disbursement of funds, including:
-
Certification that the households and units funded satisfy IDEA Program guidelines and that the units are subject to a deed restriction or other legally enforceable retention mechanism that meets the requirements of applicable regulations and policies of the Finance Board.
-
Certification that the homebuyer is a first-time homebuyer, as defined by the member.
-
A copy of the retention mechanism securing the IDEA funds.
-
Documentation verifying that the homebuyer is income-eligible as stated under “Homebuyer Eligibility” above.
-
Certificate of completion of homebuyer counseling program.
-
The member must certify that the set-aside funds are being used for an eligible purpose and that the interest rate, points, fees, and other charges for all loans made in conjunction with the AHP direct subsidy shall not exceed a reasonable market rate of interest, points, fees, and any other charges for loans of similar maturity, terms, and risk.
- A completed enrollment form.
Time Limits for Use of Subsidy
IDEA Program funds that are reserved in 2008 must be used by the member to assist eligible households by March 31, 2009. Home purchase escrows opened by March 31, 2009, may be considered eligible for reimbursement.
Additional Guidelines
The IDEA Program is part of the Bank’s Affordable Housing Program and is administered in accordance with the Federal Home Loan Bank Act, the applicable regulations and policies of the Federal Housing Finance Board, and the applicable requirements and policies of the Bank, including, without limit, the Bank’s AHP Implementation Plan, all as amended from time to time. Members participating in the IDEA Program must execute an Affordable Housing Program Direct Subsidy Agreement—Homeownership Set-Aside Program and must meet the Bank’s standards of creditworthiness.
Last Modified: January 2008
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|
Individual Development and Empowerment Account (IDEA) Program
Under the IDEA Program, the Bank sets aside a portion of its annual Affordable Housing Program contribution to provide matching grants through Bank members for downpayment and closing cost assistance to eligible homebuyers who have saved under Individual Development Account (IDA) or Family Self-Sufficiency (FSS) programs.
Uses
- Promote homeownership opportunities for very low-, low-, and moderate-income households
- Build and maintain relationships with new customers
- Expand deposits and use of your institution’s financial products
- Help achieve your institution’s community investment goals
Key Advantages
- Provides up to $15,000 for each participating household, matching up to $3 for each $1 saved by the homebuyer(s)
- Application process allocates funds for homeownership based on program eligibility, not on competitive scoring
Key Features and Guidelines
Funds Available
The Bank expects to set aside up to 10% of its annual AHP contribution each year to fund the IDEA Program.
Members may apply for a reservation of IDEA funds for up to $400,000 from January 21, 2008, to February 22, 2008. A member may apply for an additional reservation of IDEA funds for up to $50,000, subject to funds availability, until December 1, 2008, only if the member (1) applied for and received a reservation earlier in the year and (2) has fully disbursed those funds or has specifically reserved those funds for one or more homebuyers. Additional reservations will be awarded on a first-come, first-served basis.
If the Bank receives requests for IDEA funds that exceed the amount set aside for the program for that year, the Bank will allocate available funds to eligible applicants in accordance with the Bank’s AHP Implementation Plan.
Applications
The Bank will accept applications from members from January 21, 2008, to February 22, 2008.
Applications must include:
-
Completed 2008 IDEA Program Application for Funds Reservation
-
2008 IDEA Program Application for Funds Reservation Attachment A (if applicable)
-
Executed Affordable Housing Program Direct Subsidy Agreement—Homeownership Set-Aside Program
Homebuyer Eligibility
To be eligible for IDEA funds, the homebuyer must meet the following eligibility criteria:
-
Homebuyer has enrolled in the IDEA Program.*
-
Homebuyer has participated in an IDA program or successfully completed an FSS program leading to homeownership through a local housing authority.
-
Homebuyer has saved for a minimum of 10 months towards the purchase of a home.
-
Homebuyer has successfully completed a homebuyer counseling program.
-
Homebuyer is a first-time homebuyer, as defined by the member.
-
Homebuyers that enrolled in an IDA or FSS program prior to September 1, 2005, must earn 80% or less of the HUD area median income (AMI) at the time of enrollment in the IDA or FSS program and must open an escrow on a home purchase transaction within five years of the time of the IDA or FSS program enrollment.
-
Homebuyers that enroll in an IDA or FSS program on or after September 1, 2005, must meet income eligibility guidelines as published by the Bank and earn 80% or less of the HUD AMI at the time of enrollment in the Bank’s IDEA Program, and must open escrow on a home purchase transaction within five years of the time of enrollment in the IDEA Program.
* Enrollment in the IDEA Program is not a guarantee to the homebuyer of receipt of funds.
Use of Funds
IDEA funds may only be used toward downpayment or reasonable or customary closing costs in conjunction with the purchase of housing to be used as the primary residence of the homebuyer. IDEA funds may not be used by the member or the homebuyer in conjunction with projects or units receiving other subsidies from the Bank through its competitive AHP or other set-aside programs.
Disbursement of Funds
The Bank will reimburse the member after receipt of the HUD-1 settlement statement showing that the amount of subsidy requested was passed on to the homebuyer and used for eligible purposes. If the settlement statement or other closing documents show cash to the homebuyer in an amount greater than $250, then the AHP set-aside subsidy that the Bank will reimburse to the member for the homebuyer will be reduced unless the member and the homebuyer provide sufficient documentation showing that the cash back was used for downpayment or reasonable and customary closing costs or to pay down the mortgage principal or as a credit toward the household's monthly payment on the mortgage loan.
In addition, the member must submit certain certifications and sufficient documentation prior to the disbursement of funds, including:
-
Certification that the households and units funded satisfy IDEA Program guidelines and that the units are subject to a deed restriction or other legally enforceable retention mechanism that meets the requirements of applicable regulations and policies of the Finance Board.
-
Certification that the homebuyer is a first-time homebuyer, as defined by the member.
-
A copy of the retention mechanism securing the IDEA funds.
-
Documentation verifying that the homebuyer is income-eligible as stated under “Homebuyer Eligibility” above.
-
Certificate of completion of homebuyer counseling program.
-
The member must certify that the set-aside funds are being used for an eligible purpose and that the interest rate, points, fees, and other charges for all loans made in conjunction with the AHP direct subsidy shall not exceed a reasonable market rate of interest, points, fees, and any other charges for loans of similar maturity, terms, and risk.
- A completed enrollment form.
Time Limits for Use of Subsidy
IDEA Program funds that are reserved in 2008 must be used by the member to assist eligible households by March 31, 2009. Home purchase escrows opened by March 31, 2009, may be considered eligible for reimbursement.
Additional Guidelines
The IDEA Program is part of the Bank’s Affordable Housing Program and is administered in accordance with the Federal Home Loan Bank Act, the applicable regulations and policies of the Federal Housing Finance Board, and the applicable requirements and policies of the Bank, including, without limit, the Bank’s AHP Implementation Plan, all as amended from time to time. Members participating in the IDEA Program must execute an Affordable Housing Program Direct Subsidy Agreement—Homeownership Set-Aside Program and must meet the Bank’s standards of creditworthiness.
Last Modified: January 2008
© 2000-2008 Federal Home Loan Bank of San Francisco
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